MHL ARTICLE 81 - New York State Unified Court System

had he been presented with the option.
Estate of Goldie Hyman, NYLJ, Mar. 7, 2007, p. 21, col .1(Surr. Ct., Nassau Cty.) (Surr.
Riordan)
The Surrogate reforms a testamentary trust into an SNT stating: "The policy of the State of New
York is to encourage the creation of Supplemental Needs Trusts for people who are mentally or
physically disabled [citations omitted]. Courts have shown a willingness to reform wills to obtain
the benefits of an SNT where the testator's intent to supplement, rather than supplant, government
benefits is evident from the language of the testamentary instrument." In this case, the testator
clearly acknowledged his daughter's disabilities and his intent to provide for her continuing needs.
Estate of De Rosa, NYLJ, 4/20/06, p. 30, col. 2 (Surr. Ct., Kings Cty)
Surrogate permits reformation where testamentary trust was created prior to the codification of
EPTL 7-11.2, the beneficiary was aged and in need of a home attendant, the will provided that the
trust proceeds be used only to supplant and not supplement other available resources, there was a
clause in the trust providing for termination of the trust if the beneficiary was denied benefits due
to the trust’s existence and the trust also provided that the beneficiary has no power to dispose of any
trust assets.
Matter of Kamp, 7 Misc. 3d 615; 790 N.Y.S.2d 852 (Surr Ct., Broome Cty., 2005)
(Peckham, J.)
Court examines the question whether a third party testamentary trust benefitting the settlor’s
mentally retarded son who had a SCPA 17-A guardian, for which payout of income is not
discretionary with the trustee and that was created before the enactment of EPTL 7. 1-12 and OBRA
‘93 can be reformed into an SNT where the payout of both income and principal would be required
by law to be discretionary with the trustee. Court finds that the trust can be reformed because: (1)
The settlor’s intent to provide for the care of his mentally retarded son and minimize taxes is clear
and it may be presumed that he would have created an SNT is that was then possible; (2) the clear
intent of the Legislature was to benefit persons with disabilities; and (4) a guardian has the right and
power to engage in Medicaid planning; and (5) The court can substitute its judgment for what the
disabled individual would have done if able. The court rejects the reasoning of Matter of Rubin,
4 Miscd3d 634 (NY Cty 2004) as construing the law of reformation too narrowly.
Matter of Sylvia U. Rubin, NYLJ, p. 24, 6/15/04 (Surrogate Preminger)
Trusts that was created before Supplemental Needs Trusts were invented by either case law or statute
(pre- OBRA’93, pre- Escher and pre- EPTL 7-1.12) could not be reformed to be third party nonpayback
SNT’s because the reformation would alter the intent of the settlor of the trust not merely
correct a mistake in the trust and the court would be substituting its own intent for that of the
settlor’s. Moreover, it could not be said that the settlor’s intent to take care of the disabled person
could not be carried out since the guardian’s could still created “payback” (self settled) SNT’s. Court
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